Track & Trace: How to get started
by Evren Ozkaya on 08 December 2014
I am flying over the Atlantic Ocean from Berlin back to Atlanta. Still few hours to land, so I have some quiet time away from distracting phone / email to put down my thoughts on paper about what keeps me and our company busy : Track & Trace in Pharmaceutical Industry.
Normally, I cannot pull up my laptop to work easily in economy cabin due to limited leg and arm space (me being little tall may be the other explanation of space issue :-)), but this time I am enjoying a relatively empty 777 flight with the entire row of 4 seats being left to me. Listening Fazil Say (world-renowned composer and pianist) in one of the seat's entertainment system, sitting on the seat next to it with my laptop on the tray table, my legs are extending to the third seat, don't know what to do with the fourth seat. This is better than business class :) I can focus on the topic that I am about to write, which is quite important & relatively urgent.
My recent article on World Pharma Frontiers magazine on Track & Trace, "Get the Programme Started", was published last month. It was a formal attempt to educate the Pharma executives on the complexities of Track & Trace programs, giving them tips on how to get started and run it cost-effectively and explaining why they have to act now. This article was a good overview of entire Track & Trace program as I see it. Having established such a program at a global scale for a major manufacturer, I guess I have a few things to say on the topic. But companies need more specifics to kick-start their serialization programs NOW! They don't need much overviews anymore, then need action.
Unfortunately, many of the companies lack the capital and human resources to do so. And this is what this post is all about:How to kick-start your Track & Trace (Serialization) Program.
First, a little background:
As I look back the last 2-3 years of Pharmaceutical Industry, the concept of serialization legislation started to take center stage by first getting into established conferences as a session or two. Then major conferences started to dedicate an entire day to it (e.g., LogiPharma in particular). And recently entire Track & Trace focused conferences and summits are emerging around the world as the legislation deadlines are nearing in the horizon. I could count more than 10 conferences I attended personally; some as a delegate, some as a speaker and/or chairman. Here is the problem I see:
- 1. Same set of speakers dominate the stage
- 2. Same set of large Pharma companies attend as delegates
- 3. Same or similar set of content is shared from limited implementations
- 4. Sponsored by the same set of vendors (who also take stage to speak)
I believe not more than 10% of the Pharma industry players is represented in these events. This is not to show that these events are poorly organized. In fact, many of them are quite excellent. Great way to network and learn from each other. However, it shows the state of the industry on the verge of one of the largest transformations (from lot level to unit level tracking and control):
- • Only major corporations were active in Track & Trace programs, so there is still relatively limited experience in the industry
- • Only a handful of technology (hardware and software) vendors as well as consultants are there to support these large programs
I am not going to go into the details, because if you attended some of these conferences, you know what I mean. On the other hand, if you are just starting to be active in your program setup, this article can help you get in the game soon, and do it right.
Key concerns and risks for the entire industry are the following:
- • How the entire industry can be ready for regulatory requirements on time (which is now covering over 40 countries ~80% of world GDP)?
- • How will the small/medium size companies (many of them are Contract Manufacturing Organizations - CMOs) manage to invest in this program? (on the other hand, how very large companies can finish on time?)
- • Who will support and help these companies in their Track & Trace journey? Is there enough vendor/resource capacity?
Initial reactions to the above questions from the leading pharma companies were to ignore the risk of external suppliers for the most part, and focus on their internal networks / programs. As companies started to realize that our industry is a very large inter-dependent network of manufacturers, the reactions started to change from "I don't know, I don't care" to "we are at risk, we need to find a way to support our partners". Typical large pharma company may have up to 20-30% of their products outsourced to CMO or CPO partners. For virtual pharma companies, this number is 100%. Therefore, "this is not my problem" approach will not work to secure the supply & ensure compliance on time.
Long story short, here are two different - but concurrent - approaches the industry is taking to bridge the gap between demand (1000s of pharma companies/wholesalers/dispensers) and supply (handful of vendors, most of which are still very small companies).
A. Reducing the demand side:
- 1. Mergers & Acquisitions - This is happening already on a weekly basis to minimize the overall cost of compliance, quality and operations to improve bottom line; not specifically for Track & Trace, but for myriad of other reasons.
- 2. Packaging line & site consolidations - More companies are now looking at their network, running network re-design studies to find optimal network structure that minimizes investment costs, and improving utilization, hence improving bottom line.
- 3. Start early & ramp-up fast - Since there is no way out of regulatory requirements, starting early is the smartest and easiest strategy.
- 4. Standardizing the technology & implementation approach - to improve speed and cost (with pilot studies, implementation playbooks..etc.) and reduce overall workload and resources.
B. Increasing the supply side:
- 1. Adding equipment capacity - Some vendors are doubling/tripling their capacity to meet the demand in the near future.
- 2. Hiring & training new resources - Some vendors went from <50 employee company to 100s of employees in the last 24 months alone.
- 3. Improving lead times & efficiency - Many vendors are still struggling here, and in fact the equipment order lead times increased from 3-4 months up to 6+ months (a major bottleneck in the equation). Nonetheless, vendors are trying hard to improve this aspect.
- 4. Partnerships & joint ventures - To provide end-to-end solutions (some consulting companies are merging/partnering, some equipment vendors are getting in strategic alliances with implementation partners).
So, under these circumstances, what should a small/medium sized Pharma company do to get started with Track & Trace (Serialization) programs?
Here are 10 practical steps to kick-start and run your Track & Trace program:
- 1. Setup a leadership decision meeting - Come out of that meeting with the following decisions: (i) Acknowledgment of Track & Trace legislation requirements & its importance to business continuity; (ii) Who is going to sponsor this program (at VP / EVP level or President)?; (iii) Who is going to lead the program (at Director or Senior Manager level)?; (iv) When are you "roughly" planning to start your program based on resource/budget availability vs. deadlines?
- 2. Invest in an educational workshop - This is less expensive & more effective option than sending number of delegates to a Serialization conference to get the latest education, trends, industry benchmarks. Sending one delegate to a conference can rarely be enough, unless this person knows both IT, Engineering, Regulatory and Supply Chain aspects quite well (too much to ask from one person :-)). Investing in a company-specific workshop can have the benefit of educating & aligning all your stakeholders at once, specific to your business needs.
- 3. Initiate your strategic planning project - Do not under-estimate the importance of strategic planning for major programs like this, which helps save money and time by avoiding costly mistakes. Assign the project to a strong project manager (ideally internal) at 100%, and get external support only where needed. Start your site visits & data collection effort, required to build the baseline for a robust strategy.
- 4. Establish your Track & Trace strategy - This includes clear statement of business objectives, constraints & governance structure. It also requires an accurate baseline of your packaging site/line network, IT systems and supply chain. Key deliverable of the strategy is an end-to-end program budget & roll-out plan that includes high level validation & technical plans. Completing the vendor selection (component/line level, packaging site & warehouse level and enterprise/external IT systems level) process is also key as part of the strategy.
- 5. Align strategy with leadership BEFORE execution phase - Steps 1 to 5 can take you up to 3 months if you are fast. There are ways to expedite it, if you can partner up with experienced consultants. If you don't have time, and need to start ASAP, you should still do a quality program budget & roll-out plan at a minimum. However, DO NOT proceed further if the strategy is not fully aligned with leadership as this is often the main reason of many revisions & delays and costly mistakes later.
- 6. Start the execution phase with a pilot - If you still have time to do a proper pilot for learning & standardization, definitely go for it. Early adopter companies spent up to a year or more on pilot projects (some spent years). Doing a targeted pilot can take less than 9-12 months if well planned & resourced. Pay off would be in the multiples throughout the program.
- 7. Plan to resource the program for parallel implementations - to meet legislation deadlines (unless you only have a few packaging lines). Dedicated project management is a key success factor together with a central/global PMO team. Core functions should be either dedicated or at least at 40-50% dedicated during the project (IT, Engineering, Quality/Validation, Supply Chain). Support functions should also be involved from day one (Artwork, Legal, Communication, HR). Cross-functional leadership is a key skill-set and a success factor for the T&T teams to work well together.
- 8. Stay in open communication with your trading partners - As a CMO or supplier, you do not want to be rated as "risky" for serialization compliance, which may lead to lost business. As a customer, you do not want to be caught off-guard when some of your suppliers are not on track for compliance.
- 9. Stay close to developments in the regulatory environment - Periodically attend conferences or webinars. Leverage external experts as advisors. Follow key industry standards organizations such as GS1, HDMA, EFPIA, EGA..etc. Whatever you do, do not assume things are staying as they are, even after a legislation is finalized and signed into law.
- 10. Think beyond compliance - Explore ways of getting some ROI back from your investment. Every pharma company will have to invest in compliance, where will you differentiate yourself? Plan collaboration initiatives with partners to harness the value of your "big" Track & Trace data to optimize your operations. Big data for Pharma industry is Track & Trace! Plan for it early.
Serialization technology adoption is like a global pandemic. Get infected while there are still enough doctors around to support you.
Supply Chain Wizard and our expert/consultant network around the world would be glad to be your partner in your Track & Trace journey.
About the author: Evren Ozkaya, Ph.D. is the Founder and CEO of Supply Chain Wizard, LLC, a management and technology consulting firm focusing on designing strategies to improve operational performance of companies with complex supply chains. Dr. Ozkaya writes about various topics such as Entrepreneurship, Productivity, Consulting, Communication & Presentation Skills, Technology & Data Analytics, Supply Chain Security and Supply Chain Transformations.